Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2019 and 2018 are provided below. BALANCE SHEETS
12/31/19 12/31/18
Cash $408,000 $192,000
Accounts receivable 360,000 216,000
Inventory 384,000 480,000
Property, plant and equipment $608,000 $960,000
Less accumulated depreciation -320,000 288,000 -304,000 656,000
$1,440,000 $1,544,000
Accounts payable $176,000 $96,000
Income taxes payable 352,000 392,000
Bonds payable 360,000 600,000
Common stock 216,000 216,000
Retained earnings 336,000 240,000
$1,440,000 $1,544,000
INCOME STATEMENT
For the Year Ended December 31, 2019
Sales revenue $8,400,000
Cost of sales 7,152,000
Gross profit 1,248,000
Selling expenses $600,000
Administrative expenses 192,000 792,000
Income from operations 456,000
Other losses 72,000
Income before taxes 384,000
Income taxes 96,000
Net income $288,000
The following additional data were provided:
1 Dividends for the year 2019 were $192,000.
2 During the year, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale.
3 Depreciation expense, $80,000, is in the selling expense category.
Questions relate to a statement of cash flows (indirect method) for the year ended December 31st, 2019, for Harlan Mining Company.
Calculate net cash provided by operating activities using EITHER the direct method OR the indirect method.